The Centers for Medicare and Medicaid Services was supposed to, under ObamaCare, reduce payments to insurance companies that offer coverage through Medicare Advantage by 2.3%. Unsurprisingly, they changed their mind. Not only are they not going to reduce payments, they’re going to increase them by 3.3%.
Medicare needs some serious reform. That’s just a fact. If it’s not, it will be bankrupt in just a few years. So why the delay? There are a few reasons. The first is that no politician wants to be labeled as the one that “kills” Medicare. It’s long been the third rail (along with Social Security, of course) of politics – touch it and your career is over. Another reason is lobbyists. According to Philip Klein at the Washington Examiner:
In February, as CMS announced plans to cut payment rates in 2014, it triggered an intense lobbying effort from insurers, who got 160 members of Congress from both parties to send letters asking the administration to back off. The insurance industry’s lobbying group, America’s Health Insurance Plans, celebrated the about face by the administration: “CMS has taken an important step to help stabilize Medicare Advantage at a time when the program is facing significant challenges.”
“I think the impressionable libertarian kids are going to save our nation.” — Igor Birman
Late last year, I ran across video of Igor Birman, who immigrated to the United States with his family as the Soviet Union was collapsing, warning against a more centralized government healthcare system. Birman, who now serves as Chief of Staff to Rep. Tom McClintock (R-CA), was explaining that the Soviet system relied on rationing of healthcare, which would be the end result of ObamaCare.
Earlier this week, I had the chance to sit down with Birman to discuss his story, the transformation of the United States into a police state, ObamaCare, the budget, and other destructive economic policies that are being pushed by the White House.
When asked about the recent filibuster in the Senate, Birman applauded Sen. Rand Paul and noted that it was refreshing to hear a politician be so passionate. He also compared the policies implemented as part of the “war on terror” to life in the Soviet Union, where the government frequently searched homes of ordinary citizens without cause, which he called a “fact of life,” noting that “you just accepted it as much as you did the cold weather and the long lines for the basic staples of food and water.”
Birman experienced this first-hand. “A week before we left for the United States, we went to say goodbye to my uncle in St. Petersburg and when we came back, we found our apartment just absolutely ravaged,” recalled Birman. “The authorities must have been looking for whatever lame excuse they could find to either delay or disrupt our departure.”
There is some more bad news for ObamaCare. According to a recently released report from the Government Accounting Office (GAO), the Patient Protect and Affordable Care Act (PPACA) — President Obama’s signature domestic policy achievement — could cost taxpayers dearly in the long-term if cost-savings measures don’t work as intended.
The report, which was requested by Sen. Jeff Sessions (R-AL), who is the ranking Republican on the Senate Budget Committee, explains that the “effect of PPACA on the long-term fiscal outlook depends largely on whether elements designed to control cost growth are sustained.”
“Overall, there was notable improvement in the longer-term outlook after the enactment of PPACA under our Fall 2010 Baseline Extended simulation, which, consistent with federal law at the time the simulation was run, assumed the full implementation and effectiveness of the costcontainment provisions over the entire 75-year simulation period,” noted the GAO. “In contrast, the long-term outlook in the Fall 2010 Alternative simulation worsened slightly compared to our January 2010 simulation. This is largely due to the fact that cost-containment mechanisms specified in PPACA are assumed to phase out over time while the additional costs associated with expanding federal health care coverage remain.”
The baseline scenario is used by the government budget officials to determine the the cost effects of current law. However, the alternative scenario gauges budget implications based on past behavior of Congress, such as its proclivity for bypassing scheduled Medicare payments to doctors (also known as the “doc fix”).
On March 1st, the so-called sequester which is a series of automatic spending “cuts” that were agreed to in 2011 are supposed to take effect. The “cuts” are supposed to be around $1.2 trillion over 10 years spread equally among defense and non-defense spending. Democrats are complaining how women, children, and old people will be (insert one or more of the following here) starved, made homeless, and/or impoverished by the “cuts” in social welfare programs. Republican defense hawks are claiming that sequester will destroy the US military. Both groups also claim the sequester will put the economy back into recession and/or maybe even a depression. Indeed, both groups say that the sequester should be avoided at all costs and that we should “raise revenues” which is Washington speak for raising taxes to cover the amount that was supposed to be “cut”. However, if we are ever going to get our nation’s fiscal house in order, we have to allow the sequester to take effect.
Why I Hate The Sequester
Although I do believe that the sequester must be allowed to take effect, I don’t like it. For starters, $1.2 trillion in “cuts” (which are not actual budget cuts but instead are merely reductions in the rate of spending growth) is a very small amount when you look at how grave the nation’s financial condition is.
Secondly, the sequester does nothing to address entitlement programs like Social Security and Medicare which are the two long-term drivers of future financial problems.
Third, the Democrats do have a point when they say the cuts fall disproportionately on non-defense spending. The Department of Defense is the largest single item of discretionary spending and all other agencies combined do not equal it. But the DoD is only taking 50% of the cuts.
During an interview on Sunday, Rep. Paul Ryan (R-WI) suggested that if Bill Clinton were president that the fiscal issues facing the United States could be worked out.
Ryan, who has served in Congress since 1999 and was the GOP’s vice presidential nominee in 2012, told David Gregory on Meet the Press that “if we had a Clinton presidency, if we had Erskine Bowles chief-of-staff at the White House, or President of the United States, I think we would have fixed this fiscal mess by now.” Ryan added, “That’s not the kind of presidency we’re dealing with right now.”
Noel Sheppard, who covered the story at Newsbusters, snarked, “one wonders if Ryan meant a Bill Clinton presidency or a Hillary Clinton presidency.” That aside, Ryan has a point that’s worth expounding upon.
Despite friction between then-President Clinton during the 1990s, Republicans in Congress were able to pass a balanced budget and enact welfare reform and pass capital gains tax cuts. While not all was perfect during these years as Republicans began their slide toward big government, a Democratic president and Republican-controlled legislature were able to reach a compromises that led to a largely prosperous era.
Back during the 2008 campaign, then-candidate Barack Obama told Americans on more than one occasion that they would see a net-spending cut during his first-term in office. But nearly four years, that promise hasn’t come to fruition. In fact, the national debt has grown by more than $5 trillion as spending was increased, as is taught in the Keynesian school, to “prime the pump” of the economy. Obama once said such out of control spending was “unpatriotic.” My, how things have changed.
During an interview on The Late Show on Tuesday night, President Obama told David Letterman that the national debt really isn’t a big deal:
President Obama said that the U.S. does not have to “worry” about its $16 trillion debt in the “short term.” He also could not “remember” what the nation’s total debt figures were when he entered office.
“I don’t know remember what the number was precisely,” Obama told talk show host David Letterman during an interview.
Letterman asked him if Americans should be “scared” of the trillions of dollars it owes to other countries.
“A lot of it we owe to ourselves. Because if you invest in a treasury bill or something like that then essentially you’re loaning the government money. In fact, the majority of it is held by folks who live here, but we don’t have to worry about it short term,” Obama responded.
Early during his second term, President George W. Bush declared he would spend his accumulated political capital on reforming Social Security. Democrats immediately lambasted the president, falsely claiming that his reform ideas were “radical” and would leave the elderly penniless and laying in the streets. They claimed Bush would gamble the life savings of our parents and grandparents on the stock market, and that his Wall Street buddies would grow rich while swindling granny out of everything she owned.
Of course, the truth was nowhere close. Bush’s “Strengthening Social Security for the 21st Century” plan was actually quite timid. It made no changes, zero, in the Social Security program for those 55 and over. Under Bush’s plan, personal retirement accounts would be phased in, with annual contribution limits gradually increased to a staggering…4%…yes 4%…of workers’ payroll taxes allocated to their personal accounts, with annual contributions initially capped at $1,000 per year in 2009, rising over time by $100 annually, plus growth in average wages. In other words, a measly 4% of payroll taxes would have been invested in private accounts, with the other 96% staying in the Social Security Trust Fund.
And yet due to this “radical” plan, this blindingly fast weaning of Americans from the government teat, Democrats successfully terrified Americas seniors and Bush’s political capital was eviscerated. He would end up abandoning the effort and Republicans would crawl back into their shells, unwilling to again touch this third rail of American politics.
So often these days, we hear complaints about the divisive nature of partisan politics and a longing for a time when candidates were more genial and our politics more civil. Alas, in doing so we seek for the equivalent of the elusive white unicorn, something spoken of in hopeful measures but rarely seen in our nation’s history. Even our Founding Fathers, for whom I have the deepest respect and utmost admiration, were not always paragons of virtue in these matters. For example, the election of 1800 between Thomas Jefferson and John Adams, two men who had enjoyed fifteen years of friendship “without the smallest interruption,” was, shall we say, a most discourteous one. In the New England states, the Federalists warned that Jefferson was an atheist, and people would have to hide their Bibles should he be elected. By contrast, Alexander Hamilton wrote that Adams was a man of “distempered jealousy…extreme egotism” with an “ungovernable temper” which produced a natural tendency towards “detriment to any cause of which he is the chief…”
Still, an attack ad released last week by Obama surrogates at the super-PAC Priorities Action USA, which essentially implies that Romney is responsible for the death of a man’s wife, show just how deep in the mire Obama (who somehow obtained sealed divorce records of at least two prior opponents, which he used to destroy them) is willing to go to win re-election.
The ad features the bitter and forlorn visage of one Joe Soptic, a steel worker at GST Steel, one of the many companies invested in by Bain Capital. Soptic’s wife died of cancer, and he blames Mitt Romney for her death. With a tone meant to evoke in the viewer sadness for his loss and anger at Romney’s heartless complicity in her death, Soptic laments:
As a libertarian, I approve of Mitt Romney’s vice presidential choice. Naturally, I expect this statement to inflame a certain subset of the movement - but to those of you who are invested in mainstreaming libertarian thought, particularly within the Republican Party, I hope you’ll consider why the Ryan pick is actually a victory for us - on an intellectual level.
The reality is that we’re contending with a tale of two Paul Ryans. The Paul Ryan that I like, and encourage other libertarians to embrace, is Vice Presidential candidate Ryan - the man with a natural gift for communicating; who articulates the dire need for entitlement reform and balanced budgets effectively (which I recognize and appreciate, even if I disagree with some aspects of his plans). Before we can enact the bolder reforms of, say for example, Senator Rand Paul, the public needs to be introduced to the notion that entitlement programs are no longer the third rail of politics. Vice Presidential candidate Ryan is different from his evil twin Congressman Ryan, whose voting record libertarians should rightfully reject. But we need to understand the difference between the two Paul Ryans, and how one can be our enemy while the other is our friend.
In an interview with ThinkProgress, Congressman Allen West indicated that he was “fine” with keeping some key provisions of the Patient Protection and Affordable Care Act:
…West pointed to three popular provisions of the health care law that he would like to see preserved: allowing parents to keep children on their health insurance plans until 26, ensuring that people with pre-existing conditions aren’t denied insurance, and closing Medicare’s prescription drug donut hole…
West is just another Republican walking in line after Majority Leader Eric Cantor expressed his desire to retain some of the same aspects of President Obama’s landmark legislation.
Ostensibly, Republicans have no plan of their own for health insurance reform nor are they serious about freeing up the market. Instead, they are campaigning against the individual mandate in PPACA while piggybacking on some of the less unpopular provisions of the Act. This serves as a great reminder that Republicans do not have any inherent opposition to government intervention, only government intervention with a Democratic authorship. Despite campaigning for the repeal of ObamaCare since its passage two years ago, Republicans are promising to implement a meekly watered down version of the same thing.